Topic: Trade and Immigration

Goose:Gander / Illegal Immigrants:Gun Owners

I’ve spent the last few months studying and writing about electronic employment eligibility verification. This is the idea of requiring every employer in the country to check the immigration status of employees against Department of Homeland Security and Social Security Administration databases. A nationwide EEV program, building on the current Basic Pilot/”E-Verify” program, was treated as a matter of near consensus at the beginning of this past summer’s immigration debate, and the Department of Homeland Security continues to promote it.

There are a lot of weaknesses in EEV. Foremost, such a system would be subject to a lot of document fraud, just like today’s Form I-9. Requiring employers to collect these forms and check the documentation of new employees doesn’t do much to control illegal immigration.

If this process were “strengthened” with a national EEV system, continuing document fraud would drive policymakers inexorably toward “strengthening” the identity cards used in the system. Indeed, the leading immigration bill this summer would have required every new hire in America to present a REAL ID-compliant national ID card. EEV requires a national ID.

This is fine by many people who are angered by illegal immigration. But the folks who want EEV and a national ID might want to be careful what they wish for.

A group called Mayors Against Illegal Guns recently sent a letter to all the major presidential candidates asking a detailed set of questions about their positions on gun control. Among them:

… Do you support a change in federal law to require that gun purchasers show Real ID-compliant identification by 2013?

I believe that REAL ID will not be implemented. In fact, the presence of REAL ID in the immigration bill is what killed it. But if EEV goes forward, it could bring REAL ID back from the dead.

With a national ID and a national infrastructure for regulating individual behavior in place, advocates will immediately seek to expand its uses - including to gun control. So it seems that those fervent opponents of illegal immigration who want a national EEV system have a choice: Will you give up your guns to get rid of illegal immigrants?

Does Jimmy Carter Really Speak for African Farmers?

Jimmy Carter’s grasp of economics apparently hasn’t sharpened in the 27 years since he imparted a wretched U.S. economy to his successor.  Or perhaps his poor-man-advocate bona fides should be scrutinized more closely.

In a Washington Post op-ed today, the former president rightly protests the egregious U.S. farm bill for its continuation of lavish subsidies to American commodities’ producers.  Carter explains how subsidies breed overproduction, which suppresses world commodity prices, thereby reducing the incomes of poor farmers in countries where commodities dominate the economy.

Carter favors proposed amendments to the current farm legislation that would replace subsidy programs with crop insurance programs to protect farmers against excessive loss, which is an improvement, though not a solution.

But, in the last paragraph of his article, Carter contradicts everything he writes before that, revealing himself to be no friend of poor farmers abroad or simply ignorant of economic processes.  He writes:

I am still a cotton farmer, and I have been in the fields in Mali, where all the work is done by families with small land holdings.  Cotton production costs 73 cents per pound in the United States and only 21 cents per pound in West Africa, so American farmers do need protection in the international marketplace.

Now wait a second.  This is a very curious statement.  If cotton production is so much cheaper in West Africa than in the United States, then more production should happen there and less should happen here.  If Carter is really interested in the well-being of West African farmers, “whose scant livelihood depends on cotton production,” he should advocate free trade in cotton.  Why instead does he advocate that U.S. farmers be protected in the international market place?  West African incomes will continue to suffer if U.S. subsidy programs are replaced by U.S. tariffs, which is what Carter seems to be advocating.  How does it help Malian farmers lift themselves out of poverty if they can’t effectively compete on their advantages?  Higher U.S. tariffs would only drive down the world price (as subsidies do) and likely compel other importer nations to raise tariffs to protect their own producers, shrinking the market further for Malian farmers.

Meanwhile, does Carter have any empathy for America’s lower income families?Apparently, not enough.  Protection of U.S. cotton farmers artificially raises the prices of textiles, which means that clothing and shoes are more expensive than they would be otherwise.  Expenditures on necessities, like clothing and food, account for a higher proportion of the budgets of lower income families.  Thus, artificially raising the prices of those products is akin to a regressive tax – it burdens those with less income disproportionately.

Perhaps Carter is not writing as the founder of the Carter Center, an international NGO, as the byline indicates, but as a small cotton farmer from Plains, Georgia, who believes the current subsidy system unfair because the big farms get most of the largesse.

Senate Farm Bill By the End of the Week?

The Senate re-commenced debating the farm bill on Friday, after Democrats and Republicans struck an agreement over the amendments process (see my earlier blog entry here). Senate leaders are hoping that they can get a bill passed by the holiday recess, and on to conference early in the new year.

Although President Bush has threatened to veto the bill that emerged from the Senate Agriculture Committee (the bill being debated now), as well as the House Farm Bill passed in July, powerful members of Congress don’t seem too rattled. According to a recent article, Colin Peterson (chair of the House Agriculture Committee) is fairly confident that he and President Bush can get together, just the two of them nice and cozy, and come to an agreement. The money quote:

…if we can get all of these other people out of this thing and just sit down and say, ‘Look, for the betterment of the country, hopefully we can work this out.’ That’s my plan.

By “all these other people”, Mr Peterson presumably means you and I, and anyone else who is unhappy with the current state of agriculture policy in America. So sit tight, everybody, and wait for the check (currently $288 billion worth).

The Right Way to Engage China

The United States and China reached an agreement yesterday on a dispute over alleged Chinese export subsidies. In exchange for the U.S. government dropping a case it was pursuing through the World Trade Organization, China agreed to end subsidies that the U.S. claimed were promoting exports and hindering imports of steel, wood, IT products, and other manufactured goods.

Details of the case aside, the announcement shows how trade disputes with China can be resolved without resort to threats of retaliatory tariffs. This is not the first time China has changed its trade laws in response to pressure from the United States through the WTO. In 2004, China dropped a discriminatory tax refund on domestically produced semiconductors after the U.S. government filed a complaint.

Today’s announcement is another vindication of resolving trade disputes with China through a rules-based system rather than through threats of unilateral retaliation. China’s accession to the WTO in 2001 not only committed China to lowering trade barriers on a broad range of goods and services; it also brought China into the generally effective WTO dispute settlement mechanism.

In two weeks, Treasury Secretary Paulson, U.S. Trade Representative Susan Schwab and other cabinet members will meet with their Chinese counterparts in Beijing as part of the ongoing Strategic Economic Dialogue. As today’s announcement verifies, the SED represents the right approach to encouraging China to continue its evolution toward a more free and open economy.

Are 35 Million Americans Going Hungry?

A news story and op-ed in the Washington Post recently noted that about 35 million Americans, or more than 10% of the population, are “food insecure.” It sounds like there is a massive underclass of people in the nation who are so poor that they can’t get enough to eat and are going hungry. No doubt that is the idea that many articles want to put across on the reader.

But is the hunger problem really that big? Let’s go to the official definitions and data at the Department of Agriculture:

Definitions: http://www.ers.usda.gov/Briefing/FoodSecurity/measurement.htm 

Data: http://www.ers.usda.gov/Briefing/FoodSecurity/howoften.htm 

It seems to me that it’s only the “very food insecure” folks who might be sometimes going hungry. Less than 3% of the population is very food insecure at any time during a given month, and that drops to less than 1% on any given day.

Douglas Besharov has argued that the main food-related health problem today is obesity, not hunger. Poor Americans are generally suffering not from too little food, but from too much of the wrong kinds of food. 

According to federal data, about two-thirds of American adults are “overweight” and about half of those are “obese.” Those rates are actually higher for adults below the poverty level. Similarly, children below the poverty line are more likely to be overweight than other children.

Despite these modern realities, food subsidy programs continue to support an out-of-date model of increasing the caloric intake of low-income Americans. It’s time to cut them. See further discussion here.

Without the Farm Bill, We Would All Starve Tomorrow

Farmers’ groups would have us believe that without the multi-billion dollar dollops of taxpayers’ money that flow to farmers, the abundance of food we will all tuck into tomorrow would be reduced to a few grains of (probably foreign) rice. So, with Thanksgiving upon us, I thought I would provide an update of the Farm Bill debate.

Because of procedural wranglings, the Senate last week suspended consideration of the farm bill, possibly until early next year. The Republicans objected to Senate Majority Leader Harry Reid’s wish to limit the number of amendments that could be offered to the farm bill, meaning that time-honored Republican favorites such as the estate tax could not be considered. So, the bill was pulled. Assuming the Senate can pass a re-introduced bill in December, it will probably not go to conference before January.

In the meantime, our esteemed lawmakers are trading jibes about who is to blame for the current gridlock. Pity the farm-state Senators who have to go back to constituents to explain why the farm bill has been held up. In practice, so long as a bill is passed sometime in early 2008, it will probably not affect many farmers. Just in case though, and to placate farmers who say they are incapable of making planting decisions or securing loans without some sort of guarantee of government support, a bill to extend the current farm bill has been introduced.

What does all this mean for reform? Is the current stasis a positive sign? It would be if it reflected a deep unease about the farm bill and a fundamental, principled objection to the very premise of American farm policy. But, alas, so far the debate has been characterized by differences over the best way to deliver farm welfare (see my previous post) and how to spend any savings from higher commodity prices. Even the “alternative” farm bill, introduced by Sens. Richard Lugar (R, Ind.) and Lautenberg (D, N.J) delivers only modest relief to taxpayers, instead spending money on things such as the “Seniors Farmers’ Market Nutrition Program” ($200 million) and $75 million for “socially disadvantaged farmers and ranchers.”

President Bush’s veto threat still looms but, again, I have doubts about how committed he is to vetoing the bill, especially as the presidential election draws near. And, after all, he signed the egregious 2002 Farm Bill.

Anti-Immigrant Opinions are Weakly Held II

[Here’s Anti-Immigrant Opinions are Weakly Held I.]

In his book The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000 Yale history professor Paul Kennedy makes the case that, historically, great powers have risen to a point where they have become overextended because of their imperial commitments and the expenditures needed to defend them, at which point they have collapsed.

I was reminded of this when I saw the television ad Rep. Tom Tancredo is running in Iowa. (It’s getting much more play in the blogosphere than he could ever afford to buy.)

By equating immigrants to terrorists, this leader of the anti-immigrant right is shedding credibility - the coin of the political realm - at a furious pace. His argument just doesn’t square with the real world or the common sense judgments good American people make for themselves.

Anti-immigrant opinions have reached their apex. The cartoonish quality of Tancredo’s hysteria-mongering presages the fall. See for yourself.